Jottings By An Employer's Lawyer

Tuesday, May 30, 2006

Broad EEOC Administrative Subpoena Upheld -- But Where Are They Headed?

Last Friday as I was preparing for a leisurely Memorial Day weekend, the 8th Circuit was enforcing a broad EEOC administrative subpoena for the following:
(1) documents that show the name, immigrant status during employment, dates of employment, total actual compensation for each pay period, work history, and present work status for each person who worked as an electronics engineer, system analyst, or field service representative for any length of time between January 1, 2001 and the present (“work history information”); (2) copies of all documents submitted to and received from the Department of Labor (“DOL”) and the Immigration and Naturalization Service (“INS”) during the years 2001 through 2003 (“DOL and INS documents”); and (3) the complete contents of all personnel files and records pertaining to each Filipino employee present under an H-1B visa and employed at any time between January 2001 and the present (“personnel files”).
Bottom line, the EEOC gets it all. EEOC v. Technocrest, Inc. (5/26/06) [pdf].

If you are involved in a fight with the EEOC over an adminstrative subpoena, it's probably worth a read.

But even more interesting was the factual background. All of the company's technical employees were Filipino. According to the opinon:
The six charging parties charged that Technocrest illegally discriminated against them and Filipino employees as a class based on their Filipino national origin when they received less favorable treatment than promised after Technocrest recruited them from the Philippines to work in the United States. Specifically, the charging parties allege that they and Technocrest’s Filipino employees as a class were “subjected to wages less than or equal to the minimum wage, intimidated, and treated to less favorable terms and conditions of employment than promised.
It's not immediately clear to me where the traditional comparator is -- but the company's argument that the EEOC couldn't establish a prima facie case because all of its technical employees were Filipinos, was rejected as premature -- that's not the test for enforcement of an administrative subpoena.

The EEOC argument seems to stretch its traditional boundries of being tied to discrimination, but that is also the tenor of one of the latest MDV's: Pickle Verdict: Guilty: Judgment exceeds $1 million. (Technically from the news story, it appears this was a ruling by the court which would mean it is not really a verdict, but the money is still the same.) The defendant was accused of holding foreign workers, more than 50 men from India, as "virtual slaves." A district judge in Tulsa rendered the award. Although it was hailed as setting a national precedent in "human trafficking," again not normally the EEOC's territory, there was at least a mention of a comparison to treatment of American workers.

Actually, accepting at face value the allegations, both of these sound like worthy causes -- but so is finding a cure for cancer, which isn't part of EEOC's portfolio either.


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The Private Sector Implications of Garcetti v. Ceballos

Since I almost never represent public sector employers, I don't pay close attention to those decisions which focus on issues that are unique to government employers. However, anytime the Supreme Court speaks, particularly as we try to discern its course with two new justices, it probably is a good time to pay a little closer attention.

That Garcetti v. Ceballos (S.Ct. 5/30/06) [pdf] might be such a case was hinted at when the Court had it reargued following Justice Alito's confirmation. Today's 5-4 decision is being heralded in some quarters as the first case that clearly would have been decided differently if Justice O'Connor had remained on the bench. Interesting though it is, I will leave that debate to the Supreme Court cognoscenti.

The Court's holding was relatively simple: speech uttered while carrying out one's duties as a governmental employee is not protected by the First Amendment. Justice Kennedy (as the new swing man) went to the heart of the matter:
We hold that when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.
Left open for further refining is exactly when an employee speaks "pursuant to his official duties" and the question of whether academic freedom may be a special, more protected, form of speech.

For the private sector I thought Justice Kennedy's opinion showed both a real world understanding of the work place, and the principle established may carry some weight in two areas that do impact the private sector. With respect to quotes, every employer should like the following:
Ceballos’ proposed contrary rule, adopted by the Court of Appeals, would commit state and federal courts to a new, permanent, and intrusive role, mandating judicial oversight of communications between and among government employees and their superiors in the course of official business. This displacement of managerial discretion by judicial supervision finds no support in our precedents.
And since I am not a big fan of job descriptions, I personally enjoyed the following:
Formal job descriptions often bear little resemblance to the duties an employee actually is expected to perform, and the listing of a given task in an employee’s written job description is neither necessary nor sufficient to demonstrate that conducting the task is within the scope of the employee’s professional duties for First Amendment purposes.
Finally, although not a direct carry over, today's opinion should bolster similar rulings under various whistleblower statutes that employees who make complaints in the course of their regular duties are not in fact whistleblowers, but merely "doing their job." It may also slow what some have seen as the possibility of an emerging constitutional defense for certain conduct in the workplace. See First Amendment Defense in the May 29th National Law Journal.

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Thursday, May 25, 2006

Ministerial Exemption Covers Organist, But Not Chaplain?

One of the current hot topics in discrimination law is the "ministerial exception" to Title VII discrimination laws. Yesterday's decision, Petruska v. Gannon University (3rd Cir. 5/24/06) sets up, at least superficially, very different outcomes in opinions authored by two of the country's most distinguished appellate jurists. Judge Posner of the 7th Circuit earlier this year found that a discrimination claim by a church organist fell because of the ministerial exception, a court created exception to Title VII designed to prevent constitutional problems of interference with church affairs. See my April 4th post, The Words of the Gospel Set to Messiah or to 3 Blind Mice?

In Petruska, Judge Becker, conducts both a scholarly survey of the rationale for the ministerial exception and tailors for his court what he calls a "carefully tailored version." By contrast to Judge Posner's result, applying his "carefully tailored version" of the ministerial exception, Judge Becker allows a dismissed Chaplain of a Catholic College to pursue her claim of gender discrimination and retaliation, at least for now. His view of was not shared by his colleague, Judge Smith, who wrote in dissent:
Although the majority professes to adopt a “carefully tailored version of the ministerial exception” to Title VII, Maj. Op. at 3, in fact, by treating ministers like lay employees, it effectively refuses to recognize any ministerial exception, placing this Court at odds with every other federal court of appeals to consider the issue. The majority holds that “where a church discriminates for reasons unrelated to religion, . . . the Constitution does not foreclose Title VII suits.” Maj. Op. at 4. It concludes that because Gannon has not–or at least not yet–articulated a “religious belief, religious doctrine, or internal regulation” as a basis for its decision to restructure, adjudication of Petruska’s claims does not offend the First Amendment. Id. I disagree with the majority’s fundamental premise that a church’s choice regarding who performs particular spiritual functions is not necessarily a religious decision. Rather, in my view, such a decision is, by its very nature, a religious one.
In his 60 page opinion, Judge Becker discusses in some detail the three different rationales that other circuits have utilized to justify such an exeption. Those three are:
  • Government scrutiny
  • Selection of clergy
  • Inquiry into religious doctrine

Although the theoretical view is fascinating, perhaps most telling is Judge Becker's recognition that the implementation of his decision will not necessarily be easy: "We recognize that this process will often require a nuanced analysis of whether a piece of evidence calls religious doctrines into question, but we are confident that the excellent district courts in this Circuit are up to the task."

Having never had a case involving the ministerial exemption I have only a passing knowledge of the issue, but from Judge Becker's careful opinion, and the dissent, it appears certain to me that this is an issue that will soon claim attention of the Supreme Court. For anyone who is involved in such litigation or represents religious institutions or their employees, this is a very important case.

Ironically, it may well be Judge Becker's last opinion as although authored by him it was not released until five days after his death.

Update: One June 20th, the 3rd Circuit granted rehearing, not en banc, but because of the death of Judge Becker and "circumstances have arisen which require Judge Richard L. Nygaard to recuse," the case will be reheard by the one dissenting judge and two randomly selected judges.

2nd Update: Completing its full reversal from the original opinion, the reconstituted panel held that:

This Court has not previously ruled on the viability or the scope of the ministerial exception. Today, we join seven of our sister circuits in adopting the exception and hold that it applies to any claim, the resolution of which would limit a religious institution’s right to choose who will perform particular spiritual functions.
Petruska v. Gannon University (9/6/06) [pdf].

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Monday, May 15, 2006

Dr.'s Opinions Means No Use of Stereotypes

In a 2-1 affirmation of a summary judgment, the majority and dissent at least agreed on one principle for a perceived disability case:
[t]he provision addressing perceived disabilities is intended to combat the effects of archaic attitudes, erroneous perceptions, and myths that work to the disadvantage of persons with or regarded as having disabilities.” Brunko v. Mercy Hospital, 260 F.3d 939, 942 (8th Cir. 2001) (citation omitted).If a restriction is based upon the recommendations of physicians, then it is not based upon myths or stereotypes about the disabled and does not establish a perception of disability."
Breitkreutz v. Hillis (8th Cir. 5/15/06) [pdf].

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A Host of MDV's for the Merry Month of May

While I have been busy the first two weeks of May (and the end of April) in disposing of cases I had set for trial, as well as traveling around the beautiful Southeast (Charleston - Savannah - Atlanta), juries have been busy sending messages all across the country:

  • Ex-Liberty Mutual agent gets $1.3m in disability bias suit. Boston federal court jury after two weeks of deliberation over the termination of a 37 year employee who had bipolar disorder who alleged he was terminated because of his disability.
  • Troy teacher gets $2.4M for refusing to pat backs. Michigan teacher claimed that her Chinese heritage was a factor in her termination. Among the claims and the source of the headline, her principal "once suggested that Auvenshine should physically pat students on the back for doing good work. Auvenshine said she did not feel comfortable doing so because of her cultural background, and [the principal] allegedly indicated that she should modify her behavior to better fit in. "
  • Torrance Machine Operator Wins $9 Million Whistleblower Trial, reported at the SoCal Law Blog, reports on a jury verdict in downtown Los Angeles arising out of a safety complaint by a 24 year employee.
  • Bass Pro ordered to pay $2.8 million for firing man. A St. Charles, Missouri jury returned this verdict for a whistleblower who had called the police to see if his boss breaking into an apparently abandoned car to see who owned it was a crime. He was terminated 5 days later. This case was cited in an apparently unsuccessful effort to change Missouri whistleblower law to require that an employer actually violate the law in order to support a whistleblower claim. See Whistle-blower law is under attack in Missouri from the St. Louis Post-Dispatch.
  • $1.75 million awarded in racial harassment suit. This racial harassment case was only a 2 day trial and less than one day of deliberation for a Denver federal court jury. According to plaintiff's attorney, a co-worker was alleged to have made statements "that whites are superior to blacks, that blacks do not know anything, ma[de] a sexually suggestive comment and calling [plaintiff] terms that are too offensive to be published."
  • Spanked US woman gets $1.7 million in lawsuit. Yes, finally a California case, when a jury in Fresno awarded this amount where: "The most compelling evidence is that they made a middle-aged woman go in front of mostly male co-workers between the ages of 18 and 24, bend over, put her hands on the wall and spanked her with a metal sign." Obviously, given the rather intriguing facts this one has gotten a fair amount of blogosphere treatment for Janet Orlando. George Lenard at the always good, George's Employment Law Blawg, has everyone figured out with his post, Still Curious About That Employee-Spanking Case? Of Course You Are!. And if that's not enough press, don't panic, Spanked Employee to Take Story on TV Tour, including of course the required visit with Oprah. Update: The spanking case settled for $1.4 million, but the company or based on the story from the North County Gazette, Spanked Employee Sues To Collect Settlement Deal , its insurance company hasn't paid the agreed amount. So, litigation round two, to collect on the settlement. Second Update: While it is unclear what happened over the disputed settlement, an appeals court has delivered another blow to the spankee, reversing the verdict and sending it back for a trial. Unfortunately for plaintiff, the company has gone into bankruptcy and the insurance appears to have been exhausted. See my update here.

The million dollar verdict seems to be alive and well.


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An Unusual Ad Campaign - Government Union vs. EEOC

It will be interesting to see what the AFSCME hopes to accomplish with their advertising campaign being launched tomorrow in 12 cities, including Austin. The Austin Business Journal has the story, Austin to be target of new EEOC ad campaign.

The union apparently wants to point out the woes it sees at the agency including according to the article:
Significant attrition and a backlog of cases at the Equal Employment Opportunity Commission are putting the jobs of millions of Americans in jeopardy, the federation contends. The EEOC has lost 20 percent of its workforce, the federation says, and a hiring freeze has been in effect since 2001. Despite the need for additional staff, the administration still wants to cut the EEOC budget for next year by $4 million, the federation says. Consequently, the agency says its backlog of cases will grow to nearly 48,000 in fiscal 2007, according to the federation.
A little interesting for the workers of an organization to take out ads against their own employer, but that is the nature of the public sector and having an organized work force. It's not always clear that all are pulling in the same direction.

The other cities that will get to hear and see the campaign are Atlanta; Baltimore; Birmingham, Ala.; Cheyenne, Wyo.; Chicago; Dallas; El Paso; Miami; Montgomery, Ala.; San Francisco; and Washington, D.C.


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Wine Country Verdict Bad News for Sonoma County - $6.5 MDV - Updated

March 17, 2006 post - Wine Country Verdict Bad News for Sonoma County - $6.5 MDV.

Today's update: The trial judge has shaved $4 million from the jury verdict, reducing the award to a still sizeable $2.5. Plaintiff has until this Friday to accept the lowered award or face a new trial on damages. The Court also conditionally granted a new trial finding juror misconduct on the damages. Affidavits indicated jurors inappropriately increased the award 40% for attorneys fees and 35% for taxes. The Court still has to award statutory attorneys fees. See California Judge Slices $4 Million Off Award to Agoraphobic Worker, Daily Labor Report ($).

Programming note -- Although the purpose of reporting the Million Dollar Verdicts is to emphasize the reality of what can happen in employment law trials, I am always clear (I hope) to make the distinction between the jury's verdict and the Court's judgment, which is what the employer would have to pay or appeal. Often there is a great disparity between a jury's raw verdict (the amount reported in the MDV story) and what the trial judge will find is legally supported.

Even after a judgment is entered by the trial court there are multiple layers of legal steps, including appeals, which often reduce the judgment even further. In the interests of showing a more complete picture, I will update MDV stories as I find them. One fact of life is that reductions rarely get the same press as jury awards and many of the cases are settled quietly at some stage along the way. But where available, I will try to give both sides.

Seeing that a large award can and often is substantially reduced, should not diminish the awareness that the employer's conduct as seen through the lens of the courtroom was enough to outrage a group of jurors. Those lessons are what I hope the MDV's convey.


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Sunday, May 14, 2006

USERRA Claim Subject to Arbitration - 5th Cir.

Overturning a district court's finding that USERRA prohibits arbitration, the 5th Circuit has found such claims are subject to a valid arbitration agreement, just like other employment statutes. Garrett v. Circuit City Stores, Inc. (5th Cir. 5/11/06) [pdf]. Although the Court does not say so explicitly, this appears to be the first federal appellate court ruling on the arbitrability of USERRA claims. (If there are others, they are not mentioned by the Court in its opinion.)

Plaintiff, and the lower court, relied on the following phrase (and a "snippet" of legislative history) for their position:
This chapter supersedes any State law (including any local law or ordinance), contract, agreement, policy, plan, practice or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.
The problem with that view according to the Court -- it confuses the difference between substantive and procedural rights. The choice of forum -- which is what an arbitration provision is -- is not a substantive right protected by the quoted section.

As far as the legislative history, it was too small, from only one chamber, and as the Court noted must be considered in light of a long line of Supreme Court authority that legislative history is rarely to be considered, perhaps because as Judge Edith Jones noted, it is "often contrived."

Congratulations to my colleague John Harrison of the Dallas office of Ogletree Deakins who successfully argued the case for Circuit City.


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Saturday, May 06, 2006

Disparate Impact Claim Fails In 5th Circuit For Failure to Exhaust Administrative Remedies

A failure to promote case which seemed simple enough on its face nevertheless gave the 5th Circuit the opportunity to discuss a number of substantive issues. Its major holding -- a disappointed air controller's claim that his disparate impact claim should have been considered was denied because his allegation that a "good old boy" had received a promotion to supervisor instead of him, was not sufficient to exhaust his administrative remedies. Deciding a case of first impression for it, the Court found it was not reasonable to assume that an investigation of such a charge would encompass disparate impact issues as well as disparate treatment.

Although noting the review of the scope of the charge was fact intensive and thus bright lines were hard to draw, the Court focused on the absence of the mention in the charge of a neutral business policy which is "the cornerstone of any EEO disparate-impact investigation, since the EEO must evaluate both the policy’s effects on protected classes and any business justifications for the policy." Pacheco v. Mineta (5th Cir. 5/5/06) [pdf].

Even though this case involved the administrative scheme for government employees, insofar as the exhaustion principle, the Court found it was the same test as used for private sector employees and the scope of a charge filed with the EEOC.

The Court outlined an intra-circuit dispute -- whether the failure to exhaust was jurisdictional or merely a pre-requisite to suit, and thus subject to waiver and estoppel, but since no claim of the latter was made, found it did not have to choose sides.

The Court also found nothing in the record to indicate an abuse of discretion in the district court's rejection of plaintiff's request for discovery of
FAA employee-promotion data dating back to 1995, five years before the policy of which he apparently complains was implemented. More importantly, Pacheco requested this data for the entire Southwest region even though he never alleged discrimination by anyone but the Manager of the FAA’s CorpusChristi facility.
An inquiry which the Court dubbed "broad, and largely irrelevant, discovery." A good reminder of the proper scope for discovery in discrimination cases.

Concluding this simple case that managed to raise a host of novel issues, the Court joined other circuit courts which had addressed the situation by finding the district court's failure to award costs to the prevailing defendant under Rule 54(d)(1) was an abuse of discretion. Because of the strong presumption that costs should be awarded, any denial must be accompanied by a reason. When pressed here the trial court said:
It is clear that Plaintiff brought this action in good faith. He is represented by an excellent lawyer who litigates in good faith. Under such circumstances, each party should bear its own costs.
Given that every lawsuit is required to be brought in good faith, such a standard is not enough, said the Court sending the case back to the court for further consideration.

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